This week’s Animal Spirits with Michael & Ben is presented by J.P. Morgan Asset Management: We discuss: A history of the 401k. Why pensions were never as prevalent as most people assume. Why cashing out your 401k is a bad idea. The pros & cons of multi-factor investing. Competition in factor investing. If market cap…
Surveying the Damage in Stocks
Stocks are getting massacred. Absolutely slaughtered. Pounded into submission. Markets are in turmoil. Investors are panicked, shellshocked and dare I say, jittery. These are some of the words and phrases you hear bandied about when stocks are in the midst of a freefall. Fun times. Let’s take a look at the numbers to see how…
How the American Consumer Got Addicted to Choice
In 1886 a box of watches was accidentally sent to a jewelry dealer who didn’t order them. Instead of sending them back he sold them for a profit which eventually led him to start a watch distribution company. Seven years later he found a partner who helped him use catalogs to sell watches by the…
Talking ETFs, Volatility, Bonds, Value Investing, Endowments & Retirement Withdrawal Strategies
I was in New York City this week for a short trip to visit our headquarters in Bryant Park, tape some new segments for upcoming podcasts episodes, eat enough to put me into a food coma, see some stand-up comedy, and visit with colleagues and friends. This included an appearance on Bloomberg IQ to chat…
Revisiting the 4% Rule
William Bengen first wrote about the 4% rule in a 1994 research paper for the Journal of Financial Planning called Determining Withdrawal Rates Using Historical Data. He proposed a safe withdrawal rate of 4% of a portfolio’s value in the first year of retirement, an amount which is used as a baseline for spending going forward….
Animal Spirits Episode 55: How to Create the Perfect Fund
On this week’s Animal Spirits with Michael & Ben we discuss: Is universal basic income feasible in the US? How much would it cost to give everyone aged 18-65 $1,000/month? What does the perfect hedge fund look like? What do investors expect from their liquid alts & hedge funds anyways? Why isn’t the language of money…
What If You Retire At a Stock Market Peak?
Meet Sam. Sam’s entire family has terrible luck when it comes to the timing of their retirement. Sam’s great-grandparents retired at the end of 1928. Over the ensuing three years or so the stock market would drop close to 90% while the U.S. economy would contract nearly 30% in the Great Depression. In 1937, the…
Trends & Time Lapses
One of the reasons the fire-hose of information can actually make it harder to analyze the state of the world is because many people simply use point in time data instead of taking time to look at the overall trend. Current data tells you very little unless you’re able to provide context about where it’s…
Asset Allocation For Investors With an Appetite For Risk
A reader asks: I recently started my first real job, and I am currently setting up my 401k. I am selecting my asset allocation. Using the website portfolio visualizer, I have been back testing different allocations. I came across an interesting portfolio that beats most of the allocations on the website (Sharpe ratio and CAGR)….
Things You See During Every Market Correction
From the peak close in late-September through the week before Halloween, the S&P 500 fell around 10% for a quick little correction. Over the ensuing 10 trading days stocks have now bounced 6%. Does this mean the correction is now over? Was it simply another flash correction? I don’t know and neither does anyone else…
